Accolade WACC - Weighted Average Cost of Capital
The WACC of Accolade Inc (ACCD) is 6.4%.
| Range | Selected | |
| Cost of equity | 5.3% - 7.1% | 6.2% |
| Tax rate | 0.5% - 1.0% | 0.75% |
| Cost of debt | 7.0% - 7.0% | 7% |
| WACC | 5.8% - 7.0% | 6.4% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.31 | 0.4 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 5.3% | 7.1% |
| Tax rate | 0.5% | 1.0% |
| Debt/Equity ratio | 0.49 | 0.49 |
| Cost of debt | 7.0% | 7.0% |
| After-tax WACC | 5.8% | 7.0% |
| Selected WACC | 6.4% | |
| Debt/Equity | Unlevered | |||
| Peers | Company Name | ratio | Beta | beta |
| ACCD | Accolade Inc | 0.49 | -0.29 | -0.2 |
| AMED | Amedisys Inc | 0.12 | 0.16 | 0.15 |
| BTCY | Biotricity Inc | 1.96 | -0.18 | -0.06 |
| EVH | Evolent Health Inc | 0.5 | -0.13 | -0.09 |
| EWLL | eWellness Healthcare Corp | 73.3 | 0 | 0 |
| HCAT | Health Catalyst Inc | 1.41 | 1.19 | 0.49 |
| MOST | MobileSmith Inc | 0.08 | -0.69 | -0.64 |
| NH | NantHealth Inc | 29.54 | 0.4 | 0.01 |
| PHR | Phreesia Inc | 0.01 | 1.05 | 1.04 |
| TDOC | Teladoc Health Inc | 1.06 | 1.33 | 0.65 |
| Low | High | |
| Unlevered beta | -0.02 | 0.07 |
| Relevered beta | -0.03 | 0.1 |
| Adjusted relevered beta | 0.31 | 0.4 |
Accolade's CAPM model and how its cost of Equity is calculated
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for Accolade:
cost_of_equity (6.20%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (0.31) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.